Shri Gian Singh, Ambala V. ITO, W-1, Ambala

ITA 614/CHANDI/2019

AI Insights

The case involves an appeal by Shri Gian Singh against the penalty confirmed by the Ld. CIT(A)-3, Ludhiana, under section 271(1)(c) of the Income Tax Act, pertaining to the assessment year 2007-08. The penalty was initially imposed following an exparte assessment order which treated certain cash deposits as income from undisclosed sources due to the absence of any explanation from the assessee. The assessee, however, successfully appealed against the quantum addition in a separate proceeding, leading to the deletion of the said addition. The Tribunal, considering the subsequent deletion of the addition, set aside the penalty, agreeing with the assessee's argument that the foundation for the penalty had been removed.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127718 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 21-02-2023
• Assessment Year: 2007-2008
• Appeal Filed On: 02-05-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Income from undisclosed sources; Assessment record; Set aside
• Section: 147; 271(1)(c); 142(1)

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ “ए” , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH ीमती दवा संह, या"यक सद#य एवं ी $व%म संह यादव, लेखा सद#य BEFORE: SMT. DIVA SINGH, JM & SHRI. VIKRAM SINGH YADAV, AM ITA NO. 614/Chd/2019 Assessment Year : 2007-08 Shri Gian Singh, Vill: Sahapur, P.O. Durana Dist. Ambala The ITO Ward-1, Ambala PAN NO: CBDPS3993L Appellant Respondent ! " Assessee by : Shri Tejmohan Singh, Advocate # ! " Revenue by : Smt. Amanpreet Kaur, Sr. DR $ % ! & Date of Hearing : 22/02/2023 '()* ! & Date of Pronouncement : 28/02/2023 आदेश/Order PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the Assessee against the order of the Ld. CIT(A)-3, Ludhiana dt. 18/01/2019 pertaining to A.Y. 2007-08 challenging the confirmation of penalty under section 271(1)(c) of the Act. 2. At the outset it is noted that there is a delay of 10 days in filing the present appeal. Considering the submissions made by the Ld. AR and after hearing the Ld. DR, the delay is hereby condoned and the appeal is admitted for adjudication. 3. Briefly the facts of the case are that the case of the assessee was reopened u/s 147 on the basis of AIR information that there were certain cash deposits in his saving bank account maintained with Centurian Bank of Punjab, Ambala. Thereafter notices u/s 142(1) were issued and in absence of any 2 explanation submitted by the assessee, an exparte assessment order was passed under section 143 r.w.s 144 dt. 23/03/2015, wherein the AO made an addition of Rs. 28,84,000/- treating the deposits in the bank account as income from undisclosed sources in absence of any explanation submitted by the assessee. Parallelly, the penalty proceedings under section 271(1)(c) were also initiated vide notice dt. 23/03/2015. 4. During the course of penalty proceedings, no one appeared on behalf of the assessee and the AO accordingly proceeded and passed the penalty order under section 271(1)(c) on 22/09/2015 holding that the assessee in default of making concealment of income to the extent of Rs. 28,84,000/-. 5. Against the penalty order, the assessee moved in appeal before the Ld. CIT(A) wherein again, there was non-appearance and non-compliance on the part of the assesssee and referring to the material available on record, the Ld. CIT(A) has confirmed the levy of penalty. 6. Against the said order and findings of the Ld. CIT(A), the assessee is in appeal before us. 7. During the course of hearing, the Ld. AR submitted that the assessee had moved an appeal against the additions in the assessment order before the Ld. CIT, Panchkula who has since decided the matter in favour of the assessee by deleting whole of the addition amounting to Rs. 28,84,000/-. It was submitted that apparently, the order of the Ld. CIT(Appeals), Panchkula has been passed subsequent to the date of the impugned appellate order and as such the effect of the said order has not been considered while passing the impugned order by the Ld. CIT(A), Ludhiana, while confirming the penalty under section 271(1)(c) of the Act. It was accordingly submitted that where the addition in the quantum proceedings stands deleted, then the very foundation for levy of penalty does 3 not exist and in light of the same, the penalty so levied and confirmed by the Ld. CIT(A) may be set aside. 8. Per contra, the Ld. DR fairly agreed that the order of the Ld. CIT(A), Panchkula deleting the quantum proceedings has been passed on 28/02/2019 subsequent to the date of the impugned order and therefore the impact thereof has not been considered in the impugned order. Further she has relied on the impugned order passed by the Ld. CIT(A). 9. We have heard the rival contention and perused the material available on the record. We find that in the quantum proceedings, whole of the additions made by the AO amounting to Rs. 28,84,000/- has been deleted by the Ld. CIT(A), Panchkula vide her order dt. 28/02/2019 and the relevant findings read as under: “5. 1 have gone through the facts of the case, written submission filed by the appellant and assessment record. It is noted that, during ex-parte assessment proceeding the Assessing Officer made addition of Rs.28,84,000/- towards income from undisclosed sources as assessee did not participate in assessment proceedings and explain the sources of cash deposits made in his bank account of equivalent amount. During appellate proceedings the appellant has explained with satisfactory documentary evidences that he received Rs.26,02,500/- on account of sale of 20 Bigha 16 Biswa rural agricultural land at Haryoli and has submitted copy of sale deed evidencing the same. The affidavit from the purchaser Smt. Surjeet Kaur, was also filed in support of the same. The impugned land does not fall in the ambit of capital asset, therefore no capital gains arises on sale of the same. Further, the remaining amount of Rs.2,81,500/- has been claimed to be deposited out of agricultural income from cultivation of 40 bighas land as per cash book and copy of forms 'J' submitted. The same is acceptable as being reasonable and out of agricultural income during the year and past savings deposited in bank account. Thus as the assessee has satisfactorily explained the sources of impugned cash deposited therefore, the addition made is ordered to be deleted. This ground of appeal is allowed.” 10. In light of above, where the whole of the addition have been deleted in the quantum proceedings by the ld CIT(A) and which has attained finality as per records, we agree with the contention of the Ld. AR that very foundation for 4 levy of penalty no more exist. Hence the penalty so levied is hereby directed to be deleted as pronounced in the Open Court. 11. In the result, appeal of the assessee is allowed. Order pronounced in the open Court on 28/02/2023. Sd/- Sd/- दवा संह $व%म संह यादव (DIVA SINGH) ( VIKRAM SINGH YADAV) या"यक सद#य / JUDICIAL MEMBER लेखा सद#य/ ACCOUNTANT MEMBER AG Date: 28/02/2023 ( + ! , - . - Copy of the order forwarded to : 1. The Appellant 2. The Respondent 3. $ / CIT 4. $ / 0 1 The CIT(A) 5. - 2 ग 4 5 & 4 5 678 ग9 DR, ITAT, CHANDIGARH 6. ग 8 : % Guard File ( + $ By order, ; # Assistant Registrar